One of the biggest choices you will make in life is the decision on whether or not to buy a home. While renting certainly offers more flexibility for most people, owning a house can give you far more security, and something to really call your own. That being said, the best choice for you right now will depend on a number of factors, including your financial situation, career goals, and personal ambitions.
While this guide isn’t designed to tell you what to do, it should help give you a better understanding of the pros and cons of both renting and buying.
Benefits of Renting a Home
Renting a home offers a number of benefits, especially for those who don’t want to tie themselves down to one place. Indeed, renting a home provides much more flexibility for work, allowing you to more freely relocate should your dream job come up at the other end of the country. Similarly, it allows for further flexibility if your job requires you to be in different parts of the country for extended periods of time.
Furthermore, finding a rented property will usually take a significantly shorter time when compared to buying a home. There are a lot of steps on the journey to buying a home, including the initial search, securing a mortgage, organising a survey, instructing a solicitor, and so on. For renting, it is usually in the best interest of both parties for you to be moved in as soon as possible, and as a result, the process is normally much quicker.
Another benefit of renting is that it makes the short-term forecasting of your finances easier. The price of rent should not change much throughout your tenancy, and most costs related to maintenance (if the boiler breaks, for example), will be covered by the landlord. This prevents any nasty surprises from coming your way.
Renting a Home: Things to Consider
One disadvantage that you may experience as a renter is the feeling of where you are living isn’t really your own. You may be able to put your own stamp on things, but any large renovations or structural changes will probably be off the cards. Furthermore, the fact that your place of residence will only be temporary may prevent you from truly settling. Of course, this sentimental side of things won’t apply to everybody.
Additionally, the rent you pay each month will be going to your landlord/s, rather than into an investment towards your future. When you pay monthly mortgage payments, you can take solace in the fact that you are another step closer to fully owning your home. Fully paying off your mortgage acts as an enormous safety net further down the line. Once you pay off a mortgage, you won’t have to worry about monthly repayments anymore. If you rent your whole life, you’ll be paying rent for as long as you live.
Another disadvantage of renting a property is that changes to the tenancy agreement can be made at the landlord’s discretion. A landlord can choose to increase the cost of your rent, or ask you to leave should they want to sell the property or let it out to somebody else, such as a friend or family member.
Advantages of Buying a Home
When you buy your home, your monthly repayments are an investment towards your future. Once your mortgage has been paid off, the house is 100% yours. It gives you a comfortable place to live when you retire, a gift to pass onto your children, or a lucrative way to earn extra income. Most properties will naturally increase in value over time, and you could make a significant profit if this happens.
Buying a property rather than renting can save you money. For example, if you have a large deposit and buy during periods of low interest rates, you could save a lot of money in the long-term. Furthermore, fixed-rate mortgages will lock your monthly payments for a period of time - usually between two and five years - whereas a landlord might review the rent every six months or so.
When you own a property, the house is yours to do with as you see fit (with the right planning permission, of course!). You don’t need anyone else's permission to redecorate the living room, install a new kitchen, convert the loft, and so on. Similarly, you don’t need the ‘OK’ from the landlord to have pets. All of this combines to lead to a greater sense of ownership compared to renting.
If you want to go on an extended holiday, or relocate temporarily, you also have the option of renting out your home while you aren’t living there.
Buying a Home: Things to Consider
Buying a home is one of the biggest financial commitments you will make in your lifetime, and failing to pay your mortgage could have big implications on your life, beginning with the repossession of your home. With that in mind, it's important to have strong financial security before making such a commitment.
Unlike when renting, you will be responsible for all repairs and maintenance work needed for your home. It’s not as simple as calling up your landlord and waiting for him / her to do the rest. You will need to complete the repairs yourself, or hire someone to do it. Either way, you’ll have to cover the cost, which can often be an unexpected bump in the road.
Although you can rent out your home, purchasing a home is generally a commitment to settling down in one area. You will have much less flexibility should you want to change jobs or relocate, so it’s important to be happy in your job and your personal life before committing to a house purchase.
Need Further Help? Speak To Jackson Grundy
As the leading estate agent in Northampton, Jackson Grundy knows a thing or two about property. Whether you are looking to buy, sell, rent, or let property in Northamptonshire, we have the knowledge and the expertise to help you achieve exactly what you’re looking for. To find out more, get in touch with your local branch today.